UK food manufacturers stung by the strength of the pound are likely to imitate Nestle’s decision to move Kit Kat production overseas, food industry representatives said this week.
The weak euro, usually seen as an issue for `harder’ manufacturers, is also hurting the food and drink industry – which exports 63% of its output to EU countries. Since the launch of the euro, UK food processors have seen a loss of £500m worth of export business.
Several large manufacturers, including Bernard Matthews, are planning to move their operations to Hungary. According to marketing consultancy Food From Britain, the lower-cost economies of central Europe make ideal locations for new food processing plant.
Only high value commodities made in the UK, such as whisky and other luxury items are competing well against foreign brands in foreign markets, David McNair, Food from Britain chief executive said.
The Food and Drink Federation said its members were finding it difficult to compete with the eurozone. `The majority of our members export goods so the strength of the pound is a big problem. We have made several representations to government expressing our concern.’
Food manufacturers employ 500,000 people in the UK, but industry representatives say jobs have already been lost.
Nestle would not rule out further redundancies at its UK plant in York, which still makes the Kit Kat Chunky, if its export business suffered further.
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